CNOOC expects production to start by July, Executive Vice President Yang Hua told a news conference last week.

He said the five offshore projects, including the Chunxiao field, are ready to commence production in the first half of 2006.

"Regarding the Chunxiao project, I should say that technology, construction and infrastructure works had finished at the end of 2005, conditions were ripe for production," Yang said.

"But when production will start is not up to the producer," he said.

Japan says the Chunxiao field, which is located some 2 kilometers inside China's claimed side, is the median line separating the two countries' 200-nautical-mile exclusive economic zones in the East China Sea.

China does not recognize that median line.

The two sides failed to reach an agreement on the demarcation of their respective exclusive economic zones, an area that allows under international law coastal countries to control maritime resources up to 200 nautical miles offshore.

But the area between Japan and China is not enough to give the two countries such zones: The width of much of the East China Sea is less than 400 nautical miles.

Japan says it fears China might siphon off resources that could be buried under the seabed on the Japanese side of the median line.

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